RBSE Class 12 Business Studies Notes Chapter 1 Management: Introduction, Nature, Significance and Scope

Rajasthan Board RBSE Class 12 Business Studies Notes Chapter 1 Management: Introduction, Nature, Significance and Scope

The word ‘Management’ is made up of two words : manage + ment, which means to manage people tactfully. Two or more than two persons jointly make a group or organisation.

An Individual, a family, a society or an organisation uses the diverse resources to satisfy the wants, but to use these resources in an efficient manner by using scientific knowledge, philosophy and skill (art, experience and tact) is known as Management or Management Study.

Management is not a new concept to us. It is evident that it was known to people from long back. Splendid Hindu temples of Cambodia, Egyptian Pyramids and similarly many other ancient heritage sites make us wonder about their construction and details of their resources utilized. All this implies that ‘management’ must have been applied in the establishment and development of ancient civilization.

So, right from the stone age, till this modern technological era, in different time periods, the resources used, viz. material, money, wealth, man, machine and market, are more or less, same, only techniques, process, procedure and quantity kept changing according to the need of man.

Management organises and establishes coordination between men, material, money, method, market, etc. to achieve the pre-determined goals.

Management is an intangible force, (means that we can’t see it or touch it, only we can feel its power) to manage the resources (land, labour, capital) in a most effective manner to achieve the organisational goals efficiently. To maximise profit or output with minimum efforts and cost is management.

Management is a very strong and dynamic element which makes the economy of a countiy dynamic and strong.

Now, in this era of cut-throat competition, for the success of any organisation, its management should work efficiently, with minimum cost and maximum output.

Different eminent authors have given different definitions of management with different aspects, from which we can conclude that management is the art and science of setting the things through people with minimum cost and maximum output, keeping the optimum utilisation, of resources.

Management is multi-discipline in nature. It has four types of objectives – primary, secondary, personal and social.

Characteristics of Management

Management is a purposeful activity. Management has pre-determined goals.
Management is the activity that takes place in formal groups or organisations.
Management is a human activity,
Management is a challenging task.
Management is a creative activity.
Management, is an environment-oriented activity.
Management is a decision-making activity.
Management is an intangible force.

Objectives of Management Primary Objectives

To produce goods and services at minimum cost to earn maximum profits.
To distribute the products and services.
To pay fair remuneration to all the resources employed.
To earn adequate profits.

Secondary Objectives

To enhance the quality in various resources.
To use them at the right time and at the right place.
To establish coordination in their use.

Personal Objectives

To satisfy human resources as this the only primary resource among all the resources, and so to satisfy this resource in the main objective.

Social Objectives

Optimum utilisation of scarce resources.
To protect the interests of different sections of society.
To uphold ethical behaviour and practices.

Importance of Management

Overcoming competition
Optimising utilisation of resources.
Innovation and its application
Increasing and protecting the interest of organisation
Economic development of the nation.
Coordination between different interest groups
Stability in the society

Nature of Management

Management is a multi-disciplinary discipline.
Economics has contributed to management, decision-making principles, allocation of resources, optimum utilisation of resources, theories, etc.
Political science has given organisation structure, theories of organisation, its management, etc.
Biology and psychology have given theories to understand and control human behaviour.
Anthropology has contributed in the development of theories related to moral values and business ethics.
Sociology has contributed in understanding the concept of groups and their working system.

Management as a Science

Science has a systematic body of knowledge, given set of principles, theories, which are universally applicable.
The principles and theories of science are derived on the basis of experimentation.
These principles show cause and effect relationship.
Principles are used to solve any problem or set of problems in a given situation.

Management as an Art

In management, there is systematic and organised body of knowledge which is applied in practice.
Like other arts, for example, dance, painting, music, etc. management is also based on practical and personalised skills.
Like any art, a manager can reach the level of perfection through regular practice of theory and principles of management. Just like any other art, management is also a creative skill.

Management as a Profession

Management is widely taught in the universities and management exists as a discipline. Therefore, management is a profession.
Main objective of management is to fulfil the organisational goals whether they are to earn profits or to give service to them as managers.

Category of Profession

Fully Developed Profession : Based on branches of knowledge like material, law, etc.
Novel Profession : Based on new subjects like chemistry, sociology, etc.
Semi-profession : Based on technical knowledge and practice.
Marginal Profession : Based on technical skills like draftsmen.

Professional Management

Dedicated towards professional knowledge and techniques.
Application of modern management techniques.
Emphasis on team spirit in place of individual discretion.
To be ready for transformation and transformational management.

Universality of Management

It means management is done in all the organisations at every level, irrespective of its nature, size and location.
All the managers perform the same functions, irrespective of the level at which they work.
Management knowledge and skills may be transferred across the industries within and outside the country.

Scope of Management

1. Functional Areas of Business Management:

Production Management: To produce goods efficiently and effectively.
Inventory Management: It deals with purchase, store and supply.
Marketing Management: It deals with sales promotion, sale of goods ahd dealing with 4 ‘P’ i.e., Product, Price, Place, Promotion.
Financial Management: It deals with the management of finance i.e., from where
to raise funds, where to invest them, etc.
Personal/Human Resource Management : It deals with manpower planning, recruitment, selection, training and development. Main aim is to place the right person at the right place.

2. Non-business Management Functional Areas:

General/Public Utilities Management : It includes service like water, power, gas, transport, etc.
Environmental Management : To protect the environment, check and prevent pollution, maintenance of ecological balance.
Educational Management : Development of teacher training facilities, its expansion and related activities.
Security Management: Formation of military organisations, their operation and control, so that our national security remains intact.
Law Management: Following law and order, analysis of different laws.

3. Emerging Functional Areas:

Management of public enterprise
Maintenance management
Investment and portfolio management
Entrepreneurship management
Small business management
Farm management
Wholesale and retail trade management
Safety and risk management
Marketing research management
Event management

Important Definitions

Management: Art of getting the things done with minimum efforts to achieve maximum output.
Planning: Planning is the process to prepare the framework as to how work is to be done in an effective manner to achieve the desired result.
Process-Organisation : Achievement of organisationaf goals by different stages of the organisation is known as Organisational Process.
Capacity: The efficiency and capability required to complete any task is known as Capacity. Staff: Individuals hired for the completion of any task/work.
Effective : To complete the activities effectively.
Staffing: Placing the right person at the right place at the right time is known as Staffing. Art: To complete the work in a creative manner.
Direction : To guide the organisational members for the attainment of the goals in an effective and efficient manner
Science: Study of any subject with the point of view of cause and effect relationship based on theories and principles.
Control : To check the organisational goals whether they are attained in the desired manner or not.
Profession : Profession can be defined as an occupation which is backed hy special knowledge, training and these skills are used to serve the society and its success is not measured only in terms of money.

Important Definitions of Management

According to Mary Parker Folet, “Management is the art of getting the work done through other people.”
Lawrence Appley has also defined in the same way, “Management is the development of people and not the direction of things”.
According to Harold Koonts, “Management is the art of get ting things done through others and with formally organised groups”.
According to F.W. Taylor, “Management is the art of knowing what you want to do and then seeing that you do it in the best and the cheapest manner”,
According to Peter F. Drucker, “Management is a multi-purpose organ that manages a business, workers and work”.
In the words of Henry Fayol, “Management is to forecast to plan, to organise, to command, to coordinate and control activit ies of others”.